Originally opened as a coffee shop under the name Danny's Donuts, Denny's is now known for always being open and serving breakfast, lunch, and dinner around the clock. Denny's does not close on holidays and nights, except where required by law. Many of the restaurants are located in proximity to freeway exits, bars, and in service areas. Denny's started franchising in 1963, and most Denny's restaurants are now franchisee-owned.[2]

Denny's was founded by Harold Butler and Richard Jezak, who opened Danny's Donuts in Lakewood, California in 1953.[2] In 1956, a year after Jezak's departure from the then-6-store chain, Butler changed the concept, shifting it from a donut shop to a coffee shop with store No. 8. Danny's Donuts was renamed Danny's Coffee Shops and changed its operation to 24 hours. In 1959, to avoid confusion with Los Angeles restaurant chain Coffee Dan's, Butler changed the name from Danny's Coffee Shops to Denny's Coffee Shops. In 1961, Denny's Coffee Shops was renamed Denny's.[2] The business continued to expand, and by 1981, there were over 1,000 restaurants in all 50 U.S. states. The company absorbed many of the old Sambo's restaurants and used their mid-century design in some of their restaurants. In 1977, Denny's introduced the still-popular Grand Slam breakfast. In 1994, Denny's became the largest corporate sponsor of Save the Children, a national charity. All but six Denny's closed for the first time ever on Christmas 1988; many of the restaurants were built without locks, and some had reportedly lost their keys.[3]

Denny's main offices were located in La Mirada, California, until 1989. At that time, the office was first moved to Irvine, California and subsequently moved to the Spartanburg, South Carolina, headquarters of the parent company Trans World Corporation (TW Corporation) that acquired Denny's in 1987. In 1992, private equity firm, Kohlberg Kravis Roberts acquired a 47% interest in TW Corporation, later known as The Flagstar Companies, and encouraged the company to sell non-core businesses.[4] Eventually, Denny's operations dominated the parent company to such an extent that The Flagstar Companies changed its name again to Denny's Corporation. It now trades on the NASDAQ under the symbol DENN.

From 1990 through 1993, Denny's offered a free meal to anyone on his/her birthday. The offer included a limited number of meal options from a special birthday menu. The promotion began in the 1990s; though occasionally individual franchises had offered it before that time. Because too many people went to Denny's more than once on their birthdays, the management had to restrict the rules to only one meal per person, per birthday, only on the actual birthday, with proof of legal birth date required, such as a driver's license, other photo ID, or a birth certificate. Since 2009, the restaurant chain has offered a free Birthday Build-Your-Own Slam on the customer's birthday. .

In 1994, Denny's began renovating its stores, with a lighter color scheme; select locations also began serving Baskin-Robbins ice cream for a short time. Houston, Texas, was the test market for the chain-wide renovation.[5]

Denny's opened their first restaurant in Australia in December 1982, in the suburb of Forest Hill, Melbourne.[6] The Australian franchise was owned by Ansett Australia, and expanded into other states throughout the 1980s. However, changing tastes of the Australian consumer led to the sale of the chain in 1989[7] and its closure shortly thereafter.

Some Denny's restaurants employ the "diner" concept, using modular buildings that resemble classic 1950s diners. In May 1997, the first Denny's Classic Diner was opened in Fort Myers, Florida. The diner concept was created by Ron, Marcia, Marc, and Todd York, the principals of Denny's Franchisee SWFRI, Inc. Today,[when?] there are about 40 Denny's Diners in the United States. Additionally, there are several diners that resemble the modular buildings but are actually stick construction.[citation needed]

In July 2010, Denny's presence in the United States saw a major expansion when Pilot Flying J started opening Denny's locations inside their Flying J-branded truck stop locations.[8] 123 Pilot Flying J conversions were eventually completed.[9]

As of the end of 2011, there were a total of 1,685 Denny's restaurants. While the company owns and operates some restaurants, the majority are operated through a franchising model. 1,593 of Denny's 1,685 restaurants are located in the 50 U.S. states (including the District of Columbia), 11 in Puerto Rico, two in Guam, one in Chile, 60 in Canada, five in Mexico, three in Costa Rica, two in Honduras, one in El Salvador, one in United Kingdom and eight in New Zealand. There is also a Denny's attached to the Holiday Beach Hotel in Otrabanda, Willemstad, Curaçao.[10] Along with the regular Denny's menu, the Curaçao restaurant offers a selection of local ("kriyoyo") dishes. This is also true of the two locations in Guam, which have a separate "Only on Guam"[11] menu featuring Chamorro-style dishes.

In June 2012, Denny's opened a location in the Las Américas International Airport, its first location in an airport and its first in the Dominican Republic.[18][19] In July 2012, Denny's announced it had signed an agreement with a franchisee to open 50 restaurants in southern China over 15 years, beginning in 2013. This makes it Denny's largest international development deal at that time.[20][21]

On August 29, 2014, Denny's opened its first location in New York City, with some patrons waiting as long as two hours before its official opening to eat there. Located in Lower Manhattan, the location is designed to be more upscale than the typical Denny's, serves alcohol, and offers a location-exclusive $300 Grand Cru Slam, which is the typical Grand Slam Breakfast served with a bottle of Dom Pérignon.[22][23]

In November 2017, it was announced that Denny's was to open its first UK restaurant in Swansea in December 2017 as part of Parc Tawe's 15 million redevelopment scheme, occupying a 4,000 sq ft unit.[24] The restaurant opened on Christmas day 2017 for the homeless people in the city of Swansea, although the official opening to the general public was on December 27.

Denny's has been involved in a series of discrimination lawsuits involving food servers denying or providing inferior service to racial minorities, especially black customers.[27]

In 1994, Denny's settled a class action lawsuit filed by black customers who had been refused service, forced to wait longer, or pay more than white customers. The $54.4 million settlement was the largest to date under federal public-accommodations laws established thirty years earlier.[28]

In 1995, a black Denny's customer in Sacramento, California was told that he and his friends had to pay up front at the counter upon ordering their meals. He questioned the waitress: "We asked the waitress about it and she said some black guys had been in earlier who made a scene and walked out without paying their bill. So the manager now wanted all blacks to pay up front."[29]

A 1993 incident occurred when six black United States Secret Service agents visited a Denny's restaurant in Annapolis, Maryland. They were forced to wait an hour for service while their white companions were seated immediately.[30][31]

In San Jose, California, in 1994, several black teenagers were refused service unless they agreed to pay in advance.[32][33]

In 1997, six Asian-American students from Syracuse University visited a local Denny's restaurant late at night. They waited for more than half an hour as white patrons were regularly served, seated, and offered more helpings. They complained to management and to their server but were forced to leave the establishment by two security guards called by Denny's management. Then, according to the students, a group of white men came out of Denny's, attacked them[34] and shouted racial epithets. Several of the students were beaten into unconsciousness.[35][36]

After the $54.4 million settlement, Denny's created a racial sensitivity training program for all employees. Denny's has also made efforts at improving its public relations image by featuring African-Americans in their commercials, including one featuring Sherman Hemsley and Isabel Sanford, actors from the popular The Jeffersons television series.[37][38] In 2001, Denny's was chosen by Fortune magazine as the "Best Company for Minorities."[39] In 2006 and 2007, Denny's topped Black Enterprise's "Best 40 Companies for Diversity."[40]

In 2014, a Denny's location in Deming, New Mexico became subjected to a discrimination claim by an LGBT group, alleging that wait staff used homophobic slurs and refused to serve a group of gay, lesbian, and transgender customers who were attending a gay pride celebration. One year later, Denny's agreed to donate $13,000 to Deming Pride, pay $3,250 to a female customer who was subjected to the abusive behavior by wait staff, as well as retrain employees regarding discrimination policies.[41]

In 2017, staff at a Denny's in Vancouver were accused of making an Indigenous woman pay for her meal before it was served.[42] After the customer left, restaurant staff called police to report the incident, alleging that the patron had a sharp-metal object in their pocket.[43] Denny's Canada responded stating that the company was conducting an internal review regarding the incident.

In June 2017, eight Denny's locations in Colorado, including Colorado Springs and Pueblo, abruptly shut down due to a franchise owner failing to pay nearly $200,000 in back taxes as well as over $30,000 in sales tax from the previous year. In addition, several employees claimed there were issues with accounts not being paid, bounced checks and paychecks not arriving on time. As a result of the seizure of the eight Denny's locations by the IRS, numerous employees were left without employment, and claimed that no advanced warning was given regarding the sudden closures. The franchise owner responsible for the closures immediately fled the state of Colorado.[44][45]